In a large bowl, combine the flour, sugar and salt; cut in butter until mixture resembles coarse crumbs. Stir in water and extract until mixture forms a ball.
On a lightly floured surface, roll out dough to 1/4-in. thickness. Cut with a lightly floured 2-1/2-in. cookie cutter. Place 1 in. apart on ungreased baking sheets. Cover and refrigerate for 30 minutes.
Bake at 325° for 13-16 minutes or until edges are lightly browned. Cool for 2 minutes before removing to wire racks to cool completely. Dip one side of cookies in candy coating; allow excess to drip off. Place on waxed paper; let stand until set.